Mr. Hisey should know. He oversees the Lexington Troika Dialog Russia Fund, whose 77.8 percent total return through June 30 puts it at the top of this year's mutual fund heap. And it gained another 9 percent in the first three days of July.

The fund's objective is long-term capital appreciation. And while Hisey is careful to note that future returns may not equal the earlier gains, he says there is a strong likelihood that Russian economic development will continue to yield double-digit returns for the fund well into next year.

Not bad for a fund opened only a year ago.

Lexington Troika Dialog Russia Fund began on July 3, 1996, a "date of political significance," Hisey says. That was when the second round of voting for Russia's presidential elections occurred - an election that returned Boris Yeltsin to office.

The fund's minimum investment is $5,000 ($250 for an individual retirement account). There's no sales load, and annual management expenses run about 1.25 percent a year (800-526-0056).

Typically, funds that invest in emerging markets abroad, especially single-country funds such as this one, tend to be highly volatile. They can collapse when market conditions suddenly sour.

How does Hisey, sitting in Lexington's headquarters in upscale suburban New Jersey, manage the fund?

With lots of help.

Three specialists in Russia, who work for Troika Dialog Asset Management, a Russian financial management firm, scan the portfolio daily and choose potential new stocks. Early each week, usually on Monday, the Moscow team calls Hisey at Saddle Brook to discuss additions and deletions. Hisey says he usually agrees to the Moscow team's proposals.

In Saddle Brook, meanwhile, the fund relies on an advisory panel of three Russia specialists. The team consists of Keith Bush, a senior associate in Russian and Eurasian affairs at the Center for Strategic and International Studies in Washington, Marin Strmecki, once a foreign policy consultant to President Nixon, and Hisey.

Hisey himself speaks fluent Russian and as a college student studied at Leningrad State University.

The three seek to keep the fund on top of political or economic trends that could affect performance.

Of about 1,000 Russian companies in which the fund could invest, says Hisey, the portfolio holds 50 securities, with an emphasis on blue-chip companies.

The fund leans heavily on a few sectors, such as oil and gas, telecommunications, and utilities. It includes no companies from former Soviet republics.

About 25 percent of the stock holdings are in ADRs (American depository receipts) of Russian companies. These are shares sold directly on American exchanges. The portfolio also holds about 25 percent bonds.

Stock turnover has been high - about 150 percent last year - but will probably hover around 40 percent now, he says.

Can the fund continue to produce whopping returns for investors?

Hisey admits to an occasional worry about political instability in Russia. But he predicts continued gains, because the Russian economy seems sure to expand.

He forecasts economic growth of at least 1 percent this year, rising to 2 or 3 percent by 1998. "By the year 2000," he says, "growth could be up to 5 percent."

Key to Fund Objectives

Bal - Balanced: Reduces risk by investing in bonds, which are generally more conservative, as well as stocks.

Cap - Capital Appreciation: Aims at maximum returns, often by frequently selling stocks and buying new ones. These portfolios often turn over all their positions annually, borrow money to buy stocks, buy unregistered securities, and buy options - all of which are considered risky strategies.